Q. Consider the following statements:
- The share of the Primary Agricultural Credit Societies (PACS) in the delivery of rural credit is falling
- Primary Agricultural Credit Societies (PACS) can not borrow from Commercial Banks
Which among the above statements is/ are correct?
Answer:
Both 1 & 2 are correct
Notes:
- True - The share of Primary Agricultural Credit Societies (PACS) in delivering rural credit has been declining due to the rise of regional rural banks and microfinance institutions.
- True - PACS cannot directly borrow funds from commercial banks. They can only receive deposits and lend to members. For funds, they are dependent on Central Cooperative Banks.
So both statement 1 and statement 2 are correct. The share of PACS is falling in rural credit delivery and they cannot directly borrow from commercial banks.